A house is something everybody wants to have, but not all can afford. Everyone wants to buy a home because of its many perks. You get to have all the privacy and freedom you want, plus most of the rules you need to follow are your own rules. However, being a homeowner comes with lots of responsibilities – as well as expenses.
Thankfully, homeowners can still save money thanks to the many tax benefits available to homeowners. Wondering what these are? Here are some worth mentioning.
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Deductible Mortgage Interest
For individuals with a low to moderate-income, you can take advantage of a mortgage credit certificate texas. It is a certificate for first-time homebuyers provided by your mortgage lender. The mortgage credit certificate texas directly converts a portion of your interest fees in a non-refundable tax credit. You can subtract the interest you pay for your home loan. It is one of the best reasons to own a house compared to renting. You get to enjoy a considerable amount of deductions during tax time.
Deductible Property Taxes
Another reason why owning a home is worth is because it allows you to deduct your property taxes. The law now allows homeowners to deduct up to $10,000.00. For homeowners who pay their taxes thru your lenders’ Escrow account, one simply needs to check their IRS Form 1098 to check the amount you paid for the property taxes. It allows you to apply your tax deductions directly. However, if you pay your property tax payments on your municipality, you’ll need to ensure you have a record of the payment.
Tax Deductions For Points Paid To A Mortgage Lender
Sometimes, refinancing or getting a mortgage to buy a house will need you to pay mortgage points. Every time you pay your monthly mortgage, you get to build a fractional percentage as loan points. For example, your lender uses $5 as mortgage points. At the end of the year, you acquired $60 mortgage points (assuming you paid every month).
Home Sale Exclusion
For homeowners who lived in their primary residences for at least two years out of the five years before selling, you’re excluded from making tax payments. For single individuals, you can get up yo $250,000 savings. If you’re married, this can be up to $500,000.
Aging In Place Tax Deductions
Living in your home and deciding to stay on it for an extended period has it’s tax deduction perks. You can deduct the expenses you need that will assist you in aging in your home. It can be wheelchair ramps and grip bars. Even simple home adjustments such as lowering cabinets or electrical figures, you can include in your tax deductions.
Good Read: Tax Breaks for Seniors and Retirees
Private Mortgage Insurance Tax Deductions
A Private Mortgage Insurance is a fee that protects your lender if you down payment is less than 20% of the purchase price. In some cases, the amount you pay for PMI is tax-deductible. It is available for homeowners who got their loan in 2007. Your home also needs to be a primary or secondary residence. It is not applicable for investment properties. It works both for refinances and home purchases.